The employee benefits industry is fixated with the problem of rising costs. Simon Crew, a consultant in the Xerox HR Services health practice, looks at how addressing obesity issues at work can help manage this increase
There is a pervasive fear that, with a perpetual increase in premiums, more employers will start to scale back on their benefit provision, which often means that the annual renewal becomes a commoditised process designed to secure the cheapest rates.
As I write this article, I have just received a press release highlighting the latest research showing that UK medical costs will rise by 6.5 per cent in 2016, up from 6.4 per cent in 2015.
Controlling the costs can become an obsession for intermediaries and insurers, while at the same time failing to fully recognise and analyse in detail the key inputs that are driving the increase in costs.
It is true that some costs are out of our control, but in a typical medical scheme, at least 85 per cent of the costs are either wholly or partially within the control of employers and employees. The key to long-term cost control is not through benefit reduction or constant market reviews, rather gaining an understanding of employee behaviour and habits, and adapting policies and benefits to better manage and respond to their specific requirements.
Nowhere is this approach more urgently required than in managing the ‘obesity crisis’ that threatens to overwhelm our healthcare services. Simon Stevens, head of NHS England, described obesity as “a slow motion car crash in terms of avoidable illness and rising healthcare costs”.
Some of the figures associated with obesity are truly astounding and lead to serious questioning of current wellbeing policies:
- Obesity is estimated to be the fourth-largest risk factor contributing to deaths in England after hypertension, smoking and high cholesterol – and obesity is directly linked to both hypertension and high cholesterol.
- It is estimated that the direct cost to the NHS of obesity is £5 billion per annum and over £27 billion to the wider economy. These figures are expected to double by 2050 (Department of Health).
- According to the OECD, 61.9 per cent of the population (aged over 15) in the UK is classed as overweight or obese. In fact there are only four countries with a higher percentage of the population overweight and obese and the UK ranks first in Western Europe (not a league table you would aspire to top).
- The prevalence of obesity in the UK has increased from 15 per cent in 1993 to 26 per cent in 2014 (The Health and Social Care Information Centre).
- If we could reduce obesity back to 1993 levels we would prevent 5 million cases of preventable disease and 70,000 premature deaths.
While obesity is a societal problem, there are direct impacts on the workplace.
- According to NICE, a company with 1,000 employees will incur costs of £126,000 per annum in lost productivity due to obesity
- Absenteeism is far higher among obese employees (9.5 days absent per annum) compared to those with a normal body weight (six days absent per annum)
- Studies in the US show that obese adults spend 42 per cent more on direct healthcare costs than those of a healthy weight
- Obese men and women are: five and 13 times more likely, respectively, to develop type 2 diabetes; and 2.5 and four times more likely to develop high blood pressure, a major risk factor in heart disease and strokes
As the level of obesity continues to rise, so will the direct and indirect costs to business.
- Increased absenteeism will lead to reduced productivity and increased sick pay costs
- An increase in the number of long-term chronic conditions, as a direct result of obesity, will lead to greater reliance on occupational health and increase income protection claims
- Private medical insurance costs will increase due a range of medical complications from musculoskeletal to heart disease to increased prevalence of cancer
Solutions to tackle the problem of obesity are complex and multi-layered and at their core is the issue of managing employee behaviour and habits. Any wellbeing programme designed to tackle obesity will clearly focus on healthy eating and increased exercise, however without addressing the need to change employee habits, the programme will most likely fail to deliver the expected long-term results.
Obesity is being driven by a combination of lifestyle factors, increased availability of energy-dense foods, sedentary lifestyle, working environment, and motorised transport. The way we live our lives in 2016 is leading to an increase in body weight, and this trend will continue for future generations without a fundamental change in behaviour and habits.
Most approaches to tackling the problem of obesity target the perceived constituents in a logical rational manner; we will offer discounted access to a gym and will therefore encourage more employees to use the gym; if we offer a seminar programme to highlight the importance of healthy eating, more employees will eat healthily.
These ideas will only work up to a certain point and generally fail due to the fact that most people do not act in a rational way. Healthy food in the staff canteen and other employee perks sound great, but these benefits can be viewed by employees as a means of control, which essentially they are.
Employers need to help employees form healthy habits, and importantly recognise that this will not happen overnight. For an employee to engage in behavioural change, both in the short and longer term, that change needs to evoke positive emotions. Employers need to develop wellbeing programmes that pair behavioural change with an employee’s unique goals.
Most people want to form healthy habits, but employers need to recognise that there is not a one-size-fits-all solution to creating a healthier, more active and mentally resilient workforce.